“It’s wheelmageddon,” Sierra, a San Francisco resident, told me last month, referring to the hundreds of electric scooters that have flooded not only her city, but places like Los Angeles, Austin, Atlanta, Scottsdale, Washington, D.C., and Nashville in recent weeks as investor money pours into the new transportation fad. “They are everywhere . . . People are zooming past pedestrians without a single fuck to give.” Not only are the electric scooters increasingly ubiquitous, but the companies that supply them are, suddenly, valuable: L.A.-based electric-scooter company Bird is reportedly raising a $150 million round of funding led by venture-capital stalwart Sequoia. The round would value Bird at $1 billion, making it the first electric-scooter unicorn. (Sequoia declined a request for comment.)

By now, it’s not unusual to see people riding battery-powered, dockless scooters just a few miles at a time—Bird, which was founded by a former Uber and Lyft executive, has already been dubbed the “Uber of scooters.” Riders use Bird’s smartphone app to lock and unlock scooters, paying a $1 upfront fee and 15 cents per minute during use. If you’re just taking a trip a couple miles away, it’s often faster and easier to use a scooter than to hail a car, or catch a cab, or walk. According to tech analysts, the scooter market is still growing. “Bird’s recent funding round and its $1 billion valuation highlights consumer shift towards shared transportation and smart commuting,” Anand Sanwal, the C.E.O. of tech data and analytics firm CB Insights, told me. “It also underscores the massive size of the global transport market . . . There are underlying trends such as a decline in car ownership and the shift to living in urban areas which also suggest that the urban transport market that Bird and others are attacking is growing.”

Like all new ventures, the scooter companies have attracted their share of skeptics. “This is the United States of Litigation,” Bill Gurley, a venture-capital investor with Benchmark and one of Uber’s first investors, tweeted this week, warning about the costs associated with insurance for scooter companies. “‘There’s no insurance’ is remarkably temporary. Glad to make a side bet.” To drive his point home, he attached a photo of a massive pile of bikes from Chinese bike-shares, a venture that crash-landed spectacularly last year. Others question the scooters’ basic appeal—as Sierra told me, “There’s no way in the year of our Lord 2018 that I am riding one of those.” And of course, there’s the familiar pain point of regulation: companies Bird, Lime, and Spin were recently ordered by the San Francisco Municipal Transportation Agency to remove their scooters from the streets by June 4, and must apply to be permitted to operate. “It’s just like Uber and Lyft again,” one investor complained to me.

The vaunted billion-dollar valuation has lost some of its power in an era when start-ups are often willing to trade bad deal terms to hit what is largely a symbolic milestone. In fact, Alex Wilhelm, who runs Crunchbase News, determined that a $400 million valuation is far more logical for a company like Bird. Based on stats like Bird’s reported number of rides and the estimated amount of revenue generated per ride, Wilhelm concluded that Bird, which owns and pays for its scooter fleet, is paying “lots more to generate revenue . . . than Uber,” which doesn’t have proprietary cars, let alone a tech company that’s solely marketing software. If Bird’s rapid growth continues, he wrote, “you can wave your hands enough to make the $400 million valuation make some sense. It’s far harder to square a $1 billion valuation, however, especially when we remember that we are not dealing with software revenue.” In short: can Bird really scale like a tech company?

Scooter evangelists say there is a bull case. Mark Suster, a managing partner at Upfront Ventures in Los Angeles, insists that the economics of the business work out. “I have never seen revenue grow this fast in an early stage start-up. Ever,” he told me. “What is the value of any start-up? The value is what is the future economic potential of this company, and I look at the data and it’s undeniable.” Suster, who lives and works in Santa Monica, told me he was initially “skeptical because I’m 50 and I don’t get why people want to ride these scooters. It seems like a kid’s toy.” But he watched from his sixth-floor office window as streams of people rode by—not on bikes or Rollerblades, but on packs of Birds. Suster’s firm invested in Bird’s March Series B funding round. “Consumers have literally voted with their feet. Bird’s done zero marketing,” he told me. “These same people who are on average going two miles or so would otherwise be jumping in an Uber. I think it’s a net positive. I understand the skepticism until you live in an environment where you watch people use it to commute.”

So far, the U.S. electric-scooter market seems to be taking a similar shape to Chinese bike-sharing start-ups, which turned from a frenzy into a bubble inflated by oversupply. Some of those companies sold for billions; others flamed out. But with an oversupply of capital chasing diminishing returns in a late-stage business cycle, Bird is taking off like Dutch tulips. And whether out of a genuine belief in the product, or simply a sense of FOMO from missing out on funding rounds for previous big-name start-ups, investors are rushing to embrace scooters at a breathtaking rate. Bird raised $100 million on a $300 million valuation just two months ago, the same month it expanded to San Jose, Washington D.C., and San Francisco. Lime is reportedly trying to raise up to $500 million in funding. And soon, major payers in ride-hailing could pile on. Lyft is said to be exploring the scooter market, while last month Uber bought e-bike company Jump. Uber C.E.O. Dara Khosrowshahi is personally interested in the electric-scooter business. “If the unit economics and the technology is there,” he said last month, “our appetite to invest is infinite.”